Invoice Discount Calculator

How it is calculated

The tool takes a percentage off the invoice: discount = invoice amount × discount % ÷ 100 and net payable = invoice amount × (1 − discount % ÷ 100). The invoice amount is the full amount due, in dollars. The discount is a percentage, so type 2 for a 2% early-payment discount. The two results always add up to the invoice amount, and the invoice amount is echoed back. The invoice amount must not be negative and the discount must be between 0 and 100; a discount above 100 gives no result, a discount of 0 returns the full amount and 100 returns zero payable. The tool works only with the percentage. It does not read terms such as 2/10 net 30, does not check the payment dates and does not turn the discount into an annual return, so you decide whether the date you can pay falls inside the discount window.

Common mistakes

• Typing 0.02 for a 2% discount. The field is a percentage, so that is 0.02% and the saving looks tiny.
• Applying the discount to a total that includes tax when the supplier's terms apply it only to the goods amount. Check the invoice wording for what the discount covers.
• Treating the discount as free money without checking the cost of paying earlier. A 2% saving for paying 20 days sooner is a large return over a year.
• Paying after the discount window and still deducting the discount, which suppliers usually reject.
• Entering a discount above 100, or leaving the discount field empty. Neither gives a result; a discount is a share of the invoice, 100% at most.